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Available online at http://www.idealibrary.com ondoi:10.1006/cpac.2000.0414Critical Perspectives on Accounting (2001) 12, 247–267

EVIDENCE AND ARGUMENT: ANOTHER

LOOK AT AUDIT FUNDAMENTALS

ALEX. ARTHUR

University of Aberdeen, Aberdeen, UK

Traditionally, accounts of fundamental audit theory have been based on a “commonsense” epistemological framework, incorporating a correspondence theory of truthand a “naıve empirical” approach to discovery and demonstration. Although theseaccounts generally fail to link this theory convincingly to audit practice, most writerson technical audit processes have assumed (usually implicitly) that no practicalproblems arise as a result of this. This disengagement between epistemologicalgrounding and day-to-day practice is mirrored in some current writing, which takesits inspiration from the sociology of knowledge. This writing, also, fails to (andindeed cannot) engage in a discourse with practitioners on fundamental theorysince it conceives the practitioner’s rationality as constructed, and, therefore, con-tingent. This paper attempts to set out an approach to fundamental theory, aimedat avoiding the errors of the early theorists; preserving the insights gained from thesociology of knowledge, without coming to grief on its self-referential difficulties;and suggesting a route towards reconciling practice with conceptual basics.

c© 2001 Academic Press

Introduction and Aims

Fundamental theory, in the sense in which the expression is to be used inthis paper, is theory which ultimately underpins a practice, the methods of anenquiry, or the higher level theories of a discipline. The fundamental theoriesof the sciences are the subject matter of epistemological enquiry—scientistsprimarily make knowledge claims, and so the fundamental theories are the theoriesabout how reliable knowledge claims can be made. In the arts, fundamentaltheories might address the most general aesthetic values, and how these valuesare established. Fundamental theory in religion might address the reliabilityand relevance of key revelations and traditional texts, or the source of priestlyauthority. Auditing, by its own account, and in the context of the present enquiry,is taken to be most like the sciences: it is concerned with empirical enquiry

Address for correspondence: Alex. Arthur, University of Aberdeen, Department of Accounting, EdwardWright Building, Aberdeen, AB24 3QY, UK. E-mail: [email protected]

Received 31 May 1999; revised 24 March 2000; accepted 17 April 2000

2471045–2354/01/030247+21/$35.00/0 c© 2001 Academic Press

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and conclusion, and it employs, or attempts to employ, methods which bearstrong resemblances to the scientific methods of experiment and hypothesis.Fundamental theories of auditing, therefore, would take their roots in epistemologicalenquiry.

Fundamental theorizing is currently unfashionable. There are, arguably, two broadsets of reasons for this. The first set concerns failures of particular fundamentalistprojects to produce convincing results, and the second concerns the apparent cap-ture of the language of “objectivity” and “proof” by groups perceived to have sharplyright-wing political agendas (Sokal and Bricmont, 1998)1. This paper, nevertheless,sets out to be a fundamentalist paper on audit theory. It considers whether there isa need for a fundamental theory of audit evidence. It reviews some theories of thistype that have been developed in the past, and it considers an alternative approachto fundamental audit theory which avoids some of their difficulties.

One aim of this paper is to show that the traditional approaches were attemptingto address a genuine problem. Further, it will attempt to show that this problemcannot respond to approaches suggested by the sociology of knowledge (althoughthese approaches offer many valuable insights), but can be addressed from a moresophisticated epistemological standpoint than was offered by earlier audit theorists.The arguments that the paper contains could be said to start from the considerationof two conundrums. The first is associated with the fact that a fundamental study ofrationality must, obviously, be subject to its own conclusions if it is to be a rationalstudy. This is the case even where it claims to restrict itself to the study of a specificset of practices, because if it wishes to study the rationality of these practices, itmust give an account of what it means by “rationality” in the restricted context, andthis account will need to refer to some general conception of rationality in orderto justify the use of the term. This general conception can, in turn, be used toreflect the quality of the study that is being undertaken. The second, closely related,conundrum is that an account of auditor rationality which tries to show that certainfundamental evidential processes can guarantee audit conclusions cannot avoidincorporating an argument for the reliability of these evidential processes themselves.This is an implicit (and compelling) demonstration of the dependence of evidentialstatus on argument and, therefore, a demonstration that the evidential processesthemselves are not “fundamental” in the sense required: evidence, after all, dependsupon argument.

Traditional audit texts that rely on naıve (in the sense of “unreflective” or “intuitive”)empiricist presuppositions (these are further explained below) fail to produce thekinds of argument that are required in support of a rational practice of auditing.These arguments must avoid the self-referential traps that theories of rationality canfall into. They must deal, in some way, with the conundrums outlined above. Theymust also address the various truth, validity, meaning, and relevance issues involvedwithout losing sight of the practical and social contexts within which the auditor’sdemonstrations must “work”. This does not (as indicated) make all considerations oflegitimate knowledge claims matters for the sociology of knowledge, but it doesprovide insights into how the underpinnings of these knowledge claims shouldbe theorized.

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The Need for Fundamental Theory

Practitioner issues

Practitioners of some disciplines may hold quite erroneous epistemological beliefs,without necessarily damaging their ability to perform within their discipline. The naıverealism or empirical positivism of a particular physical scientist, and the idealismor intuitionism of an unreflective mathematician are, arguably, quite untenablefundamental epistemological positions. No matter how untenable they are, however,the physical and mathematical arguments of these physicists and mathematiciansmay be quite secure. The general credibility of mathematics and physics is not, onthe whole, under external threat, nor is it the subject of destructive soul-searchingamongst mathematicians and physicists. There are other disciplines, and I wouldargue that audit practice is one, where the epistemological preconceptions ofthe theorists may have damaging methodological consequences. This is, in part,because there is evidence in the history of auditing (Power, 1992, 1996) of the use offundamental theory artificially, as a device designed to make practice more credible—by making it more “scientific”, more “philosophically justifiable”, etc. There is nowidespread evidence in the history of physics and mathematics of this same anxietyover methodological credibility. Nor is there evidence in physics or mathematics ofmethodologically dubious mimicry of other, more “respectable”, disciplines.

Additionally, it might be tentatively argued that attitudes to honest practice, amongstpractitioners and trainees, can be damaged by fundamental theorizing which is seento be antipathetic or incredible with respect to their concerns—if, in other wordsit just seems to be a lot of irrelevant philosophizing. Weak theory is corrupting.This is particularly the case where this fundamental theorizing is held up as beingcharacteristic of fundamental theorizing in general, with the implication that otherdisciplines are no better served. The basis of this argument is the principle thatthe members of healthy disciplines believe in the possibility, at least in principle,of ultimately justifying their methods and conclusions. They further believe thata demonstration that this belief is erroneous should make continuing practiceuntenable. An academic researcher who discovers that a fundamental elementof an argument they were putting forward in support of a thesis is, in principle,unsupportable would be expected to withdraw or modify the thesis. This is not tosay that all supporting arguments are, in practice, made explicit—it is only to saythat the presentation of an audit conclusion, a scientific theory, or an academicargument (among other things) includes an implicit promise to the effect that theycan, if required, be made explicit.

Theoretical issues

Auditing might be characterized, along with accounting, as a “soft measurement”regime. In other words, much of the language of the sciences concernedwith discovery, proof, quantification, and demonstration is used by auditors andaccountants, but the processes by which they negotiate and agree the meanings ofthese terms are much more self-conscious, and these meanings cannot be written

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off as obvious, or given, as convincingly as is the case in some apparently moreconcrete disciplines (Hines, 1988). This has two consequences. Firstly, it makesthe job of auditing difficult, because it is harder to know what the rules are, andbecause they are more likely to change. Secondly, it makes auditing a philosophicallyinteresting discipline, because some of the ways in which measurement principlesare established are revealed through the processes of negotiation referred to (Lyas,1984, 1993; Stamp, 1981). The practitioners of ontologically and epistemologicallymore straightforward disciplines can take these processes for granted, and renderthem almost invisible. Unfortunately, the direction that traditional audit meta-theorists(e.g. Mautz and Sharaf, 1961) have taken has been to try to obscure, rather thanexplore, the very differences between auditing and the natural sciences that give itthis philosophical interest. This results in audit theory which attempts to mimic onepopular view of what natural sciences does (a kind of naıve empiricism) in a way thatmisrepresents both auditing and the natural sciences, since the latter is not nearlyso mechanically empirical as this view might suggest (Popper, 1963; Kuhn, 1970;Feyerabend, 1975)2.

If one accepts this attribution of a “soft” disciplinary status to auditing, then thepossibility is opened up of developing a type of fundamental theory which is quitedifferent from what has previously been offered3. This paper will attempt to developa theory of this type. It will suggest some clear criteria by which the rationality ofaudit decisions can be adjudicated, and will show how the limits of proof (on the onehand) and audit method (on the other) can be related without requiring a (usuallyunconvincing) reconstruction of auditing in the image of the sciences.

It will also avoid relinquishing exploration of disciplinary foundations entirelyto social theory. The application of social theory to the study of disciplinarymethodologies has been a source of contention since Kuhn (1970) argued that therewere aspects of scientific theorizing which could only be understood in terms ofcategories that many later theorists characterized as sociological4. This contentionhas partly focused on the question of whether, ultimately, only social analyseswere needed here—whether, in fact, sociology could supplant (or encompass)epistemology. In auditing, a number of writers have become associated with thisapproach—examples are Power (1995; 1996; 1992; 1997; and methodologicalconsiderations in Power, 1986), Francis (1994), who takes a closely similarhermeneutical approach, and Pentland (1993). Hacking (1999) provides a veryaccessible discussion of the issues as they relate to the hard sciences.

The difficulty for the view that sociology can supplant epistemology here, is that theclaim that social processes determine standards of validity, and rationality is, itself,a claim which needs rational support. If these standards are contingently dependentupon social processes, then so is the validity of the social theory to that effect. Socialtheory cannot show that questions about the “ultimate” rationality of some disciplinesare a mistake without raising questions about its own rationality, and, therefore,about the validity and reliability of any account that it wishes to give—includingits account of the discipline under question (Fuller, 1996). It may be possible, forexample, to represent the “rationality” of a discipline as a social construction, basedupon conditioned views of reality and learned discursive practices. A general accountof this kind must either: (a) accept the consequences of this for its own rationality,


which are damaging exactly to the extent that they comprise a critique of the disciplinebeing considered or (b) must show itself to be rational by some other, more reliable,standard. Approach (a) cannot avoid questioning its own legitimacy, as it investigatesthe legitimacy of the discipline about which it theorizes. Approach (b) admits thatthere must be other ways of accounting for disciplinary rationality, and that socialtheory cannot tell the whole story here.

Despite its successes, social theory can, therefore, only give a certain kind ofaccount of disciplinary rationality. For the reasons given above, this kind of accountcannot directly address questions about the validity of the arguments used within thediscipline it is describing. It can examine the creation of norms within a discipline,but cannot normatively evaluate it.

A very similar problem exists for other closely related theoretical approaches.The various flavours of hermeneutic theory might, for instance, be regarded asthe philosophical versions of sociology of knowledge approaches. It is somewhatbeyond the scope of this paper to explore them in detail—Power (1986), whosuggested a hermeneutic response to Lyas (1984), gives a very approachableaccount. In summary, however, hermeneutic theory attempts to explicitly recognizethe history embedded within any rational enquiry, pointing out that we can neverachieve a complete ahistorical perspective. In recognizing this, however, we are notrecognizing some “limit” to rational enquiry—just that it is a matter of pushing backpresent horizons, rather than hoping to achieve “complete” knowledge. Unfortunately,the hermeneutic approach, while offering a good heuristic model for enquiry, alsofails the self-referential test: either hermeneutic theory can be non-hermeneuticallysupported, which is self-contradictory; or it is hermeneutically revisable, which meansthat another epistemological model could take its place. In passing, it is worth notingan important problem for writers such as Francis (1994), who explicitly explores thepossibility that auditing is a hermeneutic practice (in the sense of being constantlyunder revision by practitioners acting out their professional understanding). This isthat general hermeneutic theory does not allow for epistemological closure: it cannotbe used to excuse a discipline which cannot support its methods. In other words,hermeneutical theories of knowledge do not create space for either a lack of rigouror an absence of normative roots.

A principal aim of this paper is to indicate a way out of these self-referentialdilemmas that does not abandon the considerable insights of the sociology ofknowledge, or the benefits of the hermeneutic heuristic, but avoids the more or lessexplicit, and therefore incoherent, relativism which these seem to entail. It attemptsto achieve this aim by reviewing some of the more significant traditional approachesto theorizing about audit evidence, and about its role in the audit process. It then goeson to review their deficiencies and comment on the relevance of these deficiencies toaudit theory and practice. Finally, it suggests an alternative approach to audit theoryat this level, and shows how quality of argument, rather than quality of evidentialexperience (and of audit judgement), is fundamental to the audit process.

Finally, this paper has an ethical dimension: It is difficult to reconstruct, withina sociology of knowledge framework, a convincing account of what is involved indoing an audit properly. A comfort of epistemological empiricism is its appeal to anexternal arbiter of true knowledge: the world as experienced through our senses.

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Traditional fundamental accounts of audit evidence processes which refer, explicitlyor implicitly, to an empiricist epistemology, attempt to avail themselves of this comfort.In doing so, they reveal their own ethical intent to give a general account of honestauditing—as auditing which refers to, and depends upon, the best source of reliableknowledge. A problem for accounts which relinquish this empiricist foundation—inorder, for instance, to avoid its very real conceptual difficulties (see below)—is to findan alternative touchstone.

Characteristics of Existing Fundamental Accounts

In the UK, the revised Statement of Auditing Standards 400—Audit Evidence (APB,1993), states that “Auditors should obtain sufficient appropriate audit evidence tobe able to draw reasonable conclusions on which to base the audit opinion”. Theoriginal exposure draft for the standard defined evidence as “the information auditorsobtain in arriving at the conclusions on which the audit opinion is based”. It goeson to say: “Audit evidence comprises source documents and accounting recordsunderlying the financial statement assertions and corroborative information fromother sources”. Curiously, this definition was dropped from the final standard, whichcontains no definition at all. The standard does comment on the mixed concept of“sufficient” and “appropriate” evidence, indicating that sufficiency relates to quantityand appropriateness to quality. It does not give operational guidance on how theseproperties are to be tested. It gives, instead, only general guidance, using thelanguage of materiality, risk, and audit judgement, leavened by considerations ofother available information (whether discovered through audit procedures or comingfrom other sources).

Although most of what this standard states about types of evidence and aboutsources of evidence can be related to the writings of audit theorists, the standard doesnot refer to any theoretical context. For instance, the standard distinguishes betweenthe reliability of external and internal evidence, between evidence collected by theauditors and evidence from the entity, and between oral and documentary evidence.The standard also lists methods of collecting evidence (inspection, observation,enquiry, and confirmation). These distinctions and these methods are clearly relatedto the types of evidence theory outlined by Mautz and Sharaf (1961) and Hatherly(1980), but neither this, nor the underlying epistemological considerations whichMautz and Sharaf, for instance, refer to are made explicit in the standard. This raisesthe question of whether the APB regards the theoretical bases of these statementsas either self-evident, at least to practitioners, or irrelevant. If they are self-evident topractitioners, then why is the standard required, since it does not go much beyondthem? If they are irrelevant, then why does the standard not explain why, and whatother conceptual underpinnings does it have?

This question has a flavour of perverse naıvete about it because, in a sense, theanswer to it is clear: the standard does take the principles to be obvious—to everyone,not just to practitioners—and considers that it would be ponderous to state thembecause they are part of our “common sense”. They are embedded in our socialpatterns of trust and mistrust, and are based on an unreflective epistemology based


on what might be called a kind of psychologistic empiricism—psychologistic, becausethe discussion is usually developed around methods of producing confidence andcertainty in the auditors mind, and empiricism because features of the auditor’sdirect experience are taken to be fundamental to the effectiveness of these methods.Traditional audit evidence theorists have tended to restate these underpinnings ratherthan review them. Gray (1991), in a review of audit evidence theory, starts (p. 131)with what he clearly takes to be an uncontroversial summary of the basic position:

The word “evidence” describes the whole range of “things”, such as documents, reports,guesses, inferences and calculations, upon which the auditor exercises his or her expertjudgement in evaluating whether or not the accounts show a true and fair view. More formally,evidence is “the facts presented to the mind of a person for the purpose of enabling him todecide a disputed position” (Mautz, 1958, p. 208). Now, obviously, different facts will havedifferent influences on different persons. We cannot examine individual differences here,but, assuming a homogeneity of auditor judgement for the time being, we can examine how“compelling to the mind” different categories of facts are.

Gray then goes on to reflect on the various hierarchies of evidential types whichhis picture suggests, focusing on Mautz and Sharaf (1961), Hatherly (1980), Keenan(1979) and Keenan and Anderson (1979). Mautz and Sharaf set out a typology of“natural evidence”, “created evidence”, and “rational argumentation”5, with naturalevidence being the most reliable and argumentation being the least. Hatherly’shierarchy places more emphasis on the source of the evidence. He distinguishesbetween evidential processes that are under the auditor’s control and those whichare under the control of third parties; and both of these from sources that areunder the control of the directors. Keenan makes a distinction between “primary”—best available—evidence, “secondary”—other direct, but not “best”—evidence, and“circumstantial” evidence—which is somewhat like Mautz and Sharaf’s “rationalargumentation”. There are some similarities between these accounts (especiallybetween Keenan’s and Mautz and Sharaf’s), although it could be argued thatGray over-emphasizes these and under-emphasizes the differences. Hatherly’sframework, in particular, seems to reflect social (trust and mistrust), rather thanempirical, concerns, and is different from the others in some other ways as well.It is much more concrete and more closely related to audit practice, insofar as itdepends on categories familiar to auditors rather than attempting to construct generalcategories of evidential reliability. In this respect, it operates at a different level fromthe other theories that this paper addresses, and is possibly also out of place inGray’s review for the same reason.

Flint (1988) addresses audit evidence in his postulate no. 4 (p. 31):

The subject matter of audit, for example conduct, performance or achievement or record ofevents or state of affairs, or a statement or facts relating to any of these, is susceptible toverification by evidence.

He explicitly refers to Mautz and Sharaf (1961) in his discussion of the nature ofevidence, and clearly aligns himself with their epistemological framework, giving thefollowing account:

It is a matter of personal skill for auditors to judge how much, what kind, and whatcombination of different types of evidence are necessary to enable an opinion justifiably to

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be formed and a report to be made. There must be what Mautz and Sharaf (1961, pp. 43, 68)describe as sufficient “competent evidential matter”. “Verification”, they say, “is the vehiclethat carries one to a position of confidence about any given proposition”.

His account adds something to Mautz and Sharaf, however, in explicitly referring tothe auditor’s personal skill. According to Power (1990), this is a weak move, sinceit appeals to personal qualities at a point where something more formally robust isrequired.

In Flint’s defence, he at least recognizes that something is needed here to crediblylink theory (per Mautz and Sharaf) with practice. Within the generally psychologisticframework (where verification is taken to be about achieving confidence rather thanproof ) that he and they adopt, personal qualities might reasonably seem to be apossible starting point. If psychological conviction is to be taken as fundamental,then we might wish to be able to distinguish between more and less reliablepsychological dispositions. A good audit would be one carried out by someone whowas psychologically disposed to be convinced by appropriate evidence, and notby inappropriate evidence. Flint’s postulate implicitly contains a declaration (whichPower, 1990, also notes) on the possibility of auditing. It can be restated as: Ifsomething cannot be verified by evidence, then it is not auditable.

Schandl (1978, pp. 23–24) evidence postulate is very similar to Flint’s, but replacesthe auditor’s skill, which is a personal quality, with a “system of norms”. By this, hemeans the criteria that are applied to items of evidence in order to reach a conclusion.In his further postulate on norms (p. 24), he says:

We have to accept without proof that the norms (criteria) exist in our thinking. We see onlythe effect of the norms in the acts, writings, or verbal utterances of other individuals, and wecan arrive at the concept by analyzing our own thinking. The judgements—such as good,bad, nice—are unthinkable without the assumption of an underlying standard of values(norms) which are implicit in the quality judgements, just as the unit of measurement isneeded if we want to express an opinion as the result of the measurement process.

Throughout Schandl (1978), this picture of the auditor having experiences andforming judgements, mediated by norms, re-appears. In a short section explicitlydevoted to audit evidence (pp. 89–92) he attempts to construct a theoreticalframework for audit judgement consisting of experiences, normative conceptualstructures, and mental comparisons. Where he gives a more general account of theconcept of a norm (pp. 81–86), he relates the learning of norms to infant developmentand not, significantly, to any more fundamental framework of justification. Theimplication of this seems to be that this is all justification is about—following a set ofnormative rules which have been learned at an early age.

From the above, it can be seen that many writers on the fundamental theoryof audit evidence do not distinguished between: (1) theorizing about why certainkinds of evidence processes are psychologically convincing and (2) theorizing aboutwhether they lead to valid and supportable conclusions. Most depend upon theirreaders’ professional understanding to establish the connection (with Flint, as noted,making this an explicit part of this account). As indicated, the accounts given tendto incorporate an “epistemology of common sense”—as in this example (Mautz andSharaf, 1961):

Evidence provides the means by which we can achieve that state of assurance described


as “knowing” as opposed to merely “believing”. It is thus the key to truth, which may bedescribed as “conformity to reality”.

Mautz and Sharaf go on to develop this account, distinguishing between truthsthat are impressed on our minds by natural evidence (material truths), those thatdepend upon the basic postulates of mathematics (mathematical truths), and other“abstract” truths that are not necessarily mathematical. Examples of these lattertruths are statements about material objects (e.g. the existence of the Empire StateBuilding) about which we might not have direct personal experience. Acceptance ofmaterial truths in the presence of natural evidence supporting them is taken to besimply a capacity or feature of the mind. Calculations in mathematics are held tobe similarly compelling, so long as they are not so complicated as to confuse us.It is interesting to note, here, that Mautz and Sharaf do not go on to consider thestatus of mathematical proofs which are both confusing and valid—we must acceptthese, but we are not immediately “compelled” by them. This circumstance throwsthe distinction between psychological conviction and proof into sharp relief. Abstracttruths, about objects or states of affairs that we can neither directly experience normathematically prove, can, according to Mautz and Sharaf, never by shown to becertain, but can be known with more or less probability, depending upon the qualityof the evidence which supports them.

Problems with Existing Accounts

In summary, a common starting point of existing fundamental audit theorists is amore or less psychologistic or empirical/psychologistic epistemology incorporatinga simple correspondence theory of truth. That is, the theorists believe thatpsychological conviction through sensory experience is the key stage in the processof belief confirmation and in the production of knowledge, and that true knowledgeis knowledge which corresponds to the way the world actually is6. It is possible thatneither of these beliefs would seem in the least problematical to a casual reader, butboth contain difficulties which make them more or less unsustainable. A principalpurpose of this paper is to attempt to review some of these difficulties, and makethem immediately relevant to the problem of audit evidence.

To begin with, it is worth making it quite clear why an account which confusespsychological conviction with grounds for belief must be wrong. The way that wecome by beliefs cannot count as justifications for them. Many people probably firstlearn basic arithmetic from a primary school teacher, but this account of how theycome to believe, for instance, that “1+1 = 2”, is clearly not an argument for the validityof basic arithmetic. There are no mathematical arguments which rely on referencesto the early educational experiences of the mathematicians. Also, the mere fact ofconviction, however sincere and complete, does not imply that the conviction is wellgrounded. It is easy to think of cases where compelling convictions, based on naturalevidence, have been overturned—convictions that the earth is flat, that the stars arefixed, that the magician really does have a rabbit in his hat, etc. Finally, the absenceof a conviction about something does not imply that good grounds for believing it donot exist. A mathematical proof may be valid, even though we fail to understand it,

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and are therefore unconvinced.Returning to Gray (1991), we find that there are two aspects of the accounts

that he reviews which are puzzling to him. One is that the psychologistic accountof evidence that he has taken from Mautz and Sharaf offers no very useful cluesabout how we should study auditor judgement. Judgement, under these accounts,seems to be to do with the processes we go through in the absence of evidencewhich is immediately compelling7, and it is not at all clear (from Mautz and Sharaf,or elsewhere) how we should decide that an acceptably low probability of error hasbeen achieved. That is to say—we do make these decisions, and may even be ableto say when they are made well, but we have no general theoretical basis (within theaccounts given) for assessing the reliability of our conclusions. Gray’s second puzzleis that, despite this, fee pressure has apparently led to an increased dependenceon judgement, and a decreased dependence on evidence collection. This suggeststhe possibility that auditors are more confident about their judgement than they areabout the evidence collection processes. Of course, what counts as an exercise ofjudgement, and what as part of evidence collection, is not always clear. Gray clearlyregards analytical review as being supported only by auditor judgement, and thisis plainly arguable. What is clear, however, is that it is not based on an evidentialprocess that can be easily analysed using Mautz and Sharaf’s type of theoreticalframework. At the very least, the analytical review process seems to put a highervalue on “rational argumentation” than on the collection of natural evidence. If thischange in audit method is supportable, then clearly a different kind of framework isrequired to explain it.

There are other puzzles in addition to Gray’s. First of all, there is a puzzle associatedwith Mautz and Sharaf’s need to give an account of evidential compulsion at all, ifsome account of the type they offer is true. If there were some circumstances—ourexperience of natural evidence, for instance—which were simply “compelling to themind”, then nothing would be added to this compulsion (as a compulsion) by giving anaccount of it. We would simply be compelled—the question why we were compelledwould not arise, since this would be equivalent to asking for support for somethingwhich, in itself, represented the highest possible standard of certainty. Putting thisanother way: Mautz and Sharaf seem, at least partly, to be trying to explain whynatural evidence is better than other kinds, thereby making our dependence uponnatural evidence more theoretically sound. However, if natural evidence is the bestkind available, it is vacuous to argue for its reliability—particularly since “rationalargumentation” is, for Mautz and Sharaf at least, a distinctly inferior source of reliableconviction.

Secondly, and more firmly in the context of auditing, it is clear that naturalevidence (the “best” kind) is useless unless supported by created evidence (invoices,accounting records, etc.), and that both of these need arguments to support theirrelevance to the audit opinion. According to Gray and to Mautz and Sharaf, goodnatural evidence of the existence of a fixed asset would be either a direct experienceof the asset, or, possibly the asset itself. However, without the “created evidence” oftitles, invoices, and records of account, and a “rational argument” for the relevanceof these, the mere existence of the asset would be meaningless, since ownershipcould not be attested from the natural evidence alone. It is difficult to imagine


what exactly would count as natural evidence of a socially constructed qualitysuch as ownership.

An Alternative Epistemological Approach

Some of the problems discussed in the previous section arise as a result of auditevidence theorists’ commitment to a “correspondence” theory of truth, that is, atheory which makes the truth of a statement depend upon it “correctly corresponding”to some “facts” in the world. However, much this type of theory might sound likecommon sense, no specific correspondence theory can be made to work, becausethe concept of correspondence itself turns out to be highly problematical. In fact, anyaccount of the truth of the account of correspondence that might be offered turnsout to be either circular or “question begging”. This possibly needs some expansion:In order to make a correspondence theory of truth work, we must give an accountof how the things we say can, in fact, correspond to reality. It is only by giving thisaccount that we can make sense of the idea of correspondence at all. Much ofthe controversy over correspondence theories of truth has been concerned with thevarious attempts which have been made to give (or to justify avoiding giving) suchan account.

There is an argument which suggests that all attempts to give such an accountmust fail, which goes as follows: If we could give an account of correspondence,and it was a true account, then it would have to correspond to reality. Its truth would(according to correspondence theory) depend upon its corresponding correctly. Nowif two things, say a statement and a state of affairs, correspond correctly, andthat correct correspondence made the statement true, then we would need to beable to say what “corresponding correctly” would be before we could assess thetruth of the statement. In other words, we would need to be sure that our theoryof correspondence was correct before we could judge the truth of our theory ofcorrespondence. One might argue against this that we “just know” when a statementcorresponds to reality, and that no account is required. Unfortunately, this knowledgeis by no means completely reliable—we often make mistakes about what is true andwhat is not—and is therefore a flimsy basis for an account of truth. Another counter-argument goes as follows. Mathematical truths cannot be based on correspondence(unless to some Platonic world of “ideals”—a more or less discredited proposal),so is there a possibility that some correspondence theory of truth itself can beshown to be mathematically true, thereby breaking the circularity? This counter-argument, however, makes correspondence truth dependent upon something likemathematical truth. We would say of a statement that it corresponds to reality, thatwe have a “mathematical” account of correspondence which shows that a statementwhich corresponds to reality must be true, and that this statement is, therefore,true. What we would have constructed, in our attempts to justify a correspondencetheory of truth, is a theory of truth which can actually dispense with the concept ofcorrespondence and replace it instead with whatever “mathematics” underpins ournotion of correspondence.

This is not the place to dwell further on the difficulties with correspondence theories

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of truth, but the scale of the problem should be apparent. For a more comprehensiveinvestigation, a good place to start might be with Putnam (1981) and Quine (1969,and elsewhere), who are concerned with the problem of reference—the putativerelationship between words and, where relevant, “objects”—broadly defined—in theworld, which, for a correspondence theorist, gives the words their “meanings” andallows definite truth conditions for sentences to be spelled out.

“Coherence”, rather than correspondence, theories of truth avoid these difficulties,but at the expense of intuitive appeal. These theories give accounts of truth in termsof coherence between statements. In other words, if statement X is coherent withall the other statements which we hold (perhaps for the moment) to be true, thenX is also true. It is easier to give a non-circular account of coherence than to givesuch an account of correspondence. This is partly because we do not have to stepoutside the domain of statements to do it—we do not, in other words, have to try toelucidate a relationship between things which are statements and things (to whichthe statements correspond) which are not. Also, conveniently enough, we have aset of ready-made relationships between statements which are essentially related tothe concept of truth, since they are used to determine the truths of some statementsfrom the truths of others. These are the relations of formal logic, used to analyse thesteps in an argument in order to determine whether each properly follows from thepreceding one, so that the truth of one implies the truth of the other.

In passing, those with an interest in legal evidence theory will have noted a recenttrend away from correspondence theories and towards coherence theories of truth.The traditional picture of neutral evidence collection followed by theory constructionis breaking down here, also, and being replaced by a view of evidence collection ashypothesis driven. The focus has shifted from “picturing reality” to “telling a coherentstory”. (See Jackson and Doran, 1996, for a review of the issues. They refer further,in this context, to Tillers, 1988 and Jackson, 1998.)

The principal theme of this paper is to develop a fundamental theory of auditevidence based on a coherence theory of truth, and avoiding psychologistic errors,which is directly related to the discussions of truth, reality, and proof that are foundin the later Wittgenstein (particularly Wittgenstein, 1972 and 1979; in contrast toWittgenstein, 1974). In order to do this, it is necessary to develop some of thisphilosophical background.

Philosophical Background

If the statement “There is no limit to what can intelligibly be believed about the world”was true, then it would be intelligible to believe that some fact about the world couldmake it false. For some, this contradiction would count as a “reductio ad absurdum”8

proof that there are limits to what can be intelligibly believed, and would possiblyinspire their inquiries into the foundations of true knowledge. For others, the variousparadoxes of justification are just logical puzzles, which sophistically fence with theplain evidence that we are unable to provide satisfactory foundations for even themost obvious common sense certainties. These others might feel their scepticismto be reinforced by the reflection that there is a non-trivial circularity associated


with needing to know that epistemological theory is reliable, since a fundamentalepistemological theory could only be reliably known on the basis of its own criteria.

From the time of the Greeks, philosophers have aligned themselves on one or theother side of this divide, or have contrived cunning bridges or disguises for it. Kant’sfundamental epistemological insight—that the limits of intelligible belief must be asat least as securely established as our reasons for believing in them—is a milestoneon this third way. It represents a crucial recognition: that the contrary of whatever ourfundamental epistemological theory is, must, in a strong sense, be inconceivable,and not just “shown to be wrong”, if we are to avoid the circularity mentioned above(Smith, 1933). In other words, the possibility of being wrong about certain basicfacts about the world must be literally unthinkable. Unfortunately, the successesof the physical sciences, and some eighteenth century misconceptions about howthese were achieved, placed empirical discovery and sensory experience at thecentre state of his enquiry, so that Kant’s approach to the “synthetic a priori”—thenecessarily true foundations of our empirical knowledge—became a search for thenecessary forms of possible experience, rather than a more appropriately focusedsearch for the necessary forms of possible knowledge.

During the twentieth century, various writers have explored the role of language inscientific and philosophical theorizing. This paper will focus on Wittgenstein, mostparticularly themes from Wittgenstein (1972) and Wittgenstein (1979). Previously,language had been regarded simply as a neutral and transparent tool (howeverflawed, see Russell, 1974, and, arguably, the early Wittgenstein—also 1974), andit was, more or less, assumed that any intelligible scientific or philosophical theorycould be expressed in language. However, there can be a tension, to the point ofincoherence, between what we believe and what we can say about these beliefs. Itis easy to establish this with a familiar type of argument against radical scepticism:A radical sceptic must be uncertain even of the reliability of language to conveymeaning correctly. In order to articulate their scepticism, they would need to be surethat they were saying what they meant to say about it. They could never be sure ofthis (since they are radical sceptics), so any attempt to articulate their scepticismwould contradict it. In other words, saying “I am a radical sceptic” is also to say “I amsceptical about the meaning of what I say”. If I am sceptical about the meaning of “Iam a radical sceptic”, then I must allow that I may be saying that I am not.

Some beliefs about language (e.g. that what we say makes sense) arepresupposed by our use of it. A scepticism about these beliefs may not beunintelligible, but an articulation of this scepticism by the sceptic certainly would be.Our scientific and philosophical theories, as well as other theories we might entertain,are (at least insofar as we entertain them publicly) articulated theories, so they mustalso, a fortiori, presuppose these beliefs. Wittgenstein discusses the importance andnature of rule following in a number of places, both in Philosophical Investigations(Wittgenstein, 1972), On Certainty (Wittgenstein, 1979), and elsewhere. It is possibleto read one of the themes that appear in these discussions as an argument thatrequests for instructions about how to follow a rule cannot simply go on ad infinitum,and that we have to accept, at some stage, that rule following is just something thatpeople can do. It is a feature of our “form of life”, and fundamental to being able toplay the language game at all. Bearing in mind the conflicts that can arise between

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what we believe and what we can say about these beliefs, however, a more formal re-casting of this argument suggests itself. How can someone be completely ignorant ofwhat is involved in rule following, and yet still be able to ask a question about how todo it, since asking questions—using language—is an example of sophisticated rulefollowing? This version of the argument does not rely on our instinctive repugnancefor ad infinitum explanations, nor on an unanalysable appeal to a “form of life”, but,instead, directly reveals the incoherence of the request.

This kind of argument takes the language game metaphor—another Wittgen-steinian theme—completely seriously: the articulated study of any discipline (in-cluding philosophy, sociology, and auditing) is undertaken by making moves in alanguage game. One kind of move is to ask a question, but certain questions, e.g.questions about whether the game is playable, can have only a restricted range ofanswers. If the game is unplayable, then a question about it fails to be a question atall, and so would not have an answer (far less a negative one, which is what we might,initially, expect). It can, therefore, only have the answer “yes” within the game. Fora special subset of these questions, the reasons for this restriction are “synthetic”.They depend upon a kind of incoherence, but not on an incoherence between dif-ferent moves in the game: they depend, instead, on an incoherence between thetruth of certain statements and the possibility of seriously playing the game at all.Statements such as “language works”, for example, are synthetic statements aboutthe world that cannot be false. They are synthetic, because they are not statementsabout the rules of any particular language practice (i.e. they are not logical rules,meaning rules, or grammatical9 rules), and they cannot be false in the sense thattheir falsehood cannot form part of any articulable theory.

This is important, and needs a little amplification. Coherence theories of truth focuson incoherence between statements, and they also tend to take logical incoherenceas the paradigmatic case. In other words, if some set of statements (S) could beshown to have, as a strict consequence, that some further statement was both trueand false, then S would be shown to be incoherent. In the case of a coherence theoryof truth: if S was some set of coherent statements which represented our currentbeliefs about something, and adding some statement “C” to S made S incoherent,then C would be false. Consider, however, the statement “It is possible to makestatements”(P). It should be clear that it must be possible to add this statement to anyset of statements S without rendering S incoherent. This means that P can never befalse. Which also means that not P (“It is not possible to make statements”) can neverbe true. “It is not possible to make statements” is not tautologically false, however,in the way that a logical contradiction is. It would be quite intelligible to describesomeone as believing that it was not possible to make statements (if, for instance,they never made any)10. In addition, this statement does not contain or entail acontradiction in the way that “Fred is a married bachelor” does—the contradictionis between its truth and the possibility of saying it, rather than being a result of themeanings of the words it contains.

In summary, the search for synthetic a priori beliefs may be hopeless, so that whatPower (1986) refers to as our “Cartesian anxiety”—that we can never be relievedof personal doubt—cannot be satisfactorily addressed. However, there are clearlystatements (typically about the possibility of language) that are both synthetic and


irrefutable (in the sense of not being articulably falsifiable). Attempts to approach,exploit, or find methods of refuting this conclusion lie, arguably, at the heart of whathas been called the “linguistic turn” in philosophical theory. Wittgenstein’s (1972)repeated insistence that questions can only be asked from within an epistemologicalframework (what he called a “form of life”, or, on occasions, a “language game”) ispossibly the key insight of twentieth century analytical philosophy.

Insofar as epistemological fundamentals are concerned, the Kantian project ofexploring what it is possible to believe has been replaced by the Wittgensteinianone of exploring what it is possible to say. Since we can only ask questionsabout our beliefs, i.e. can only publicly consider them, if we can state them,this second approach turns out, so far as articulable theorizing is concerned,to be the equivalent of the first. It is perfectly comprehensible, therefore, to talkabout a linguistic fundamentalist epistemology. The most fundamentally supportableempirical theories are not those whose contraries deny our experience, but thosewhose contraries deny the possibility of articulated theorizing itself.

Auditing and Coherence

So far, the argument of this paper has tried to show three things: that a fundamentaltheory of auditing is desirable; that theorists who adopt a “common sense”epistemology of sensory perception and psychological conviction cannot producesuch a theory; and that there are good reasons for believing that such a theory is,nevertheless, possible. The argument for the last of these three has focused on acertain type of fundamental theorizing which takes as its starting point the syntheticpossibility of articulating anything at all. This starting point is fundamental in thesense that its falsehood is incoherent with any articulable theory.

The next task is to show the direct relevance of this to auditing, and this canbe straightforwardly accomplished. Instead of the conception of audit judgementbased, ultimately, on sensory perception, which is offered by the traditional writersreviewed above, what is required is a conception of an audit conclusion based onvalid argument and agreed discursive moves. The ultimate practical foundation ofthis argument may be an agreement that certain tests have been correctly carriedout, and that they have had certain agreed results. The ultimate epistemologicalfoundation will be a demonstration that if the audit argument is unreliable, or ifthe articulated agreement is unreliable, then no articulation is possible. The “linkto reality”, which Mautz and Sharaf sought in sensory experience and empiricistepistemology, is found instead in the possibility of articulation: the world must bethe kind of place where language is possible, because the possibility of language ispresupposed by any articulable theory, and we cannot articulate to the contrary. Iffundamental epistemological theory can be intelligibly re-cast as discursive, then itis clearly no longer necessary to look to empiricism for auditing fundamentals. Thekind of fundamental theory of auditing we need is one which shows how it can befirmly rooted in the nature of discursive practice.

Clearly, practical audit procedures will not, in general, attempt to producedemonstrations of this rigour—any more than all mathematical proofs refer explicitly

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to the fundamental logic of mathematical demonstration—but this is not required.What is required is that auditors be prepared, in principle, to go on producingarguments to support their methods until any relevant interlocutors, by questioningthem further, express a scepticism about the possibility of talking at all. At thispoint, either meaning collapses and noise replaces discourse, or the completedemonstration has been given. Flint’s (1988) comment (noted above) that we mustconsider the auditability of a report or other audit object can now be brought into asharper focus. The normatively unanalysable professional judgement he appealsto can be replaced with an argument that has the overall form of the followingconditional: “Either doing X counts as an audit, or no audit is possible, since nofurther relevant tests can be carried out”. A statement of this kind can, of course,also be disputed, and supported, until either it or its contrary is shown to have theimpossible consequence indicated.

Further, if an audit is requested or required, either by statute or by individualcontract, then the presumption that the requested audit is possible to do has alreadybeen accepted.

It might be thought conceivable that auditors are being asked to do somethingwhich cannot be done; but this could only be the result of some kind of a mistakeor deception. It cannot be a valid move, within any discourse, for a request to beboth seriously made and recognized by the discursive parties as impossible to fulfil.This is easily demonstrated by an example. Let A ask B to do some task X. If Bknows that A believes X to be impossible, then B has the best kind of grounds forbelieving that he/she has not properly understood the request. This is because Bcan consider A as having said the equivalent of “X is impossible” and “Do X”. “Xcannot be done” and “You must do X” are contradictory, and contradiction makesmeaning indefinitely ambiguous. It might be argued against this that there are manycounter-examples—e.g. in political discourse—where demands are made which areimpossible to fulfil. These are exceptions which prove the rule, however, since theyhelp to distinguish the sense of “seriously” in “for a request to be. . . seriously made”.Many political demands are not seriously made (in this sense), since the demandmakers do not expect them to be fulfilled.

In this case, the argument can take the stronger form of: having agreed that anaudit is possible, and having agreed that certain procedures are all that could countas auditing in this case, then demonstrating (agreeing) that these procedures havebeen carried out will be equivalent to demonstrating that the audit has been carriedout. If the only possible test of a sales ledger balance is, say, to carry out a detailedsales ledger review (or some other relevant test), and this has been correctly done,then the auditor has fulfilled the statutory requirement. If it cannot be agreed that thistest is adequate, then it is not possible to test the sales ledger, and, consequently, notpossible to provide an audit opinion. The arguments arising in this paper do not, byany means, rule out the possibility that statutory auditing, as it is currently conceivedand required, is impossible. What they are intended to do is provide a fundamentalepistemological framework within which the possibility and reliability of auditing canbe addressed.


Conclusion

Considerations such as the above lead to a conclusion that the audit argument(including the elements of the argument that support the evidential statements) is amore important focus of fundamental audit enquiry than the evidence process itself,and that a fundamental theory of auditing which does both the practical and theethical work of Mautz and Sharaf’s empiricism can be constructed on this basis.

This paper has attempted to review traditional fundamental accounts of auditevidence with two purposes: to show their relevance, on the one hand, and theirerrors, on the other. Their relevance has been related to questions of honest practiceand normative professional direction. Their errors, it is suggested, have been to dowith their adherence to a psychologistic empiricism and a correspondence theory oftruth. In their place, an alternative account has been suggested, which incorporatesa coherence theory of truth and relates the underpinnings of auditing to the under-pinnings of discursive practice in general. This type of theory has the advantages ofavoiding the conceptual difficulties associated with empiricism and correspondence,and suggests a framework for the normative analysis of audit argument—somethingwhich is notably missing from empirical research into auditor judgement.

A possible, and mistaken, interpretation of the argument of this paper would bethat it tries to rationalize present audit practice by constructing a fundamental theoryof auditing whose starting point is that the way we do it must be right because it isthe only way available. The reason this interpretation would be mistaken is that thepaper does not argue that what auditors actually do now is correct, or even that acoherent concept of an audit can be developed within any particular circumstances.Flint’s (1988) warning that we must decide whether an audit is possible remainscentral, although it should be re-focused as a warning to clearly negotiate and agreethe audit task with the various participants before agreeing to carry it out.

What the paper suggests is a fundamental framework for reviewing audit practicesand, importantly, for recognizing their limitations. The growth of the audit culture(Power, 1994, 1997) has been made possible, partly, because of poor understandingof the limitations of auditability. The frameworks of traditional fundamental audittheorists (Flint, 1988, possibly excluded) do not reflect on these limitations, anddo not offer any approach to analysing them. If truth is correspondence, and ourbest access to it is via natural evidence, then the only limitation on auditing is ouraccess to appropriate natural evidence for the attestation of the audit outcome. Whilea “complete” audit, under this conception, may be expensive or time-consuming,there is no reason—in principle—why it cannot be done. The approach suggestedby this paper explicitly recognizes that such a standard of complete auditabilitydoes not, even in principle, make sense, and that we must negotiate, for each newtype of engagement, what would count as an audit under those circumstances.This has never, notably, been done by parties to the traditional corporate audit.This negotiation would not have a concept of possible complete auditability as itsbackground. It would need, instead, to construct such a background by agreeing whatthe limitations of auditability were: this agreement would be based on an argumentof a certain form. It would say, in effect: if this is an appropriate subject for audit,then the following procedures must count because they are all that is available, and

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if this cannot be agreed, then the audit is not possible.Because our “common sense” epistemology tends to focus on experience, and

on correspondence between language and reality, it is possible that this language-based approach to fundamental audit theory will not be particularly easy to sell tothe audit profession. Two points need to be made in response to this. One is thatactual audit practice cannot be explained in terms of any basic theory of the typethat Mautz and Sharaf propose. As Gray observed, reliance on careful argument—analytical review, in particular—is becoming a larger part of audit practice. Also, asexplained above, the actual evidence collection processes which auditors rely onneed argument to support their value. Argument precedes evidence collection in theaudit hierarchy. The second is that audit professionals may be as unreflective about—and as ignorant of—their basic epistemological rules as physical scientists are. In“A Brief History of Time” Stephen Hawking (Hawking, 1988) spells out his empiricistcredentials, claiming (in a joke aimed at philosophers) that he knows the world isround because he has flown round it. The research for which he is most famous isinto the nature of black holes, which he has not flown round nor, in any other way,empirically inspected. Good audit professionals actually produce arguments whichmake sense in terms of the framework suggested in this paper. In discussions withcolleagues about what audit work needs to be carried out, in debates about auditingstandards, and in courts of law, standards of validity, coherence, relevance, andreasonableness are routinely applied. Arguments based on psychological facts aboutthe characteristics of an auditor’s sensory apparatus, or about whether the inputsfrom that apparatus are likely to result in sound judgements, are notably absent.It is unfortunate, but academically irrelevant, if auditors themselves are unable torecognize the significance of this focus.

An appropriate auditing standard couched in terms of the type of fundamentaltheory this paper proposes would state something like the following. The auditorshould construct an argument from statements which are not disputed, or would notbe disputed by the participants in the audit process, to a conclusion which expressesthe audit opinion. These basic statements will include both “statements of fact” andstatements which explain exactly what is meant by auditing in the circumstances inquestion. If there are no statements which are indisputable, then there is no languagewith which to construct an audit argument. The standard might go on to explaincurrent evidence collection processes in something like the following terms: If aninterested party agrees that a well-designed test of a certain kind has been carriedout, then it would be incoherent of them to dispute the results of the test. This mayseem a perverse way to say that tests need to be carried out, but it makes explicit thevital fact that a test is only useful to the audit argument if those whom the argument isaimed at agree that it has been properly carried out. This agreement is a discursivemove, not an empirical one.

It is worth restating the ethical consequences of the present gulf betweenfundamental theory and daily practice. If the fundamental theories of a disciplinelack credibility among its practitioners, then this not only weakens the conceptualframework of the discipline, but also sets a poor standard of fundamental theory ingeneral to neophytes of the discipline. Audit practitioners who believe in the possibilityof being able to ultimately justify their procedures, and who recognize the value of this


belief, will have a more secure concept of honest auditing than those who regard thebusiness of justification within auditing as being part of a less than generally crediblegame, even—or perhaps especially—if it is a game which is thought of as being noworse than that played by members of any other discipline. This paper suggests thatdoing auditing properly means being prepared to ultimately justify one’s methods,and that, although the details of this justification may be negotiated, there is anultimately non-negotiable discursive framework within which this can be done.

Acknowledgements

I would like to thank Mike Power of the London School of Economics for his commentson an early draft of this paper, Stefano Zambon of the University of Padua for being ahelpful discussant at the 1997 IPA conference, and Penny Ciancanelli of StrathclydeUniversity for comments on a late re-draft.

Notes

1. These writers give a thoughtful and committed critique of the errors that this has led critical theoryinto, but unfortunately they have some erroneous epistemological convictions of their own

2. Various writers—even some with distinctly positivist prejudices—have commented on the “under-determination” of scientific methodology by empiricist epistemology. Karl Popper is possibly the bestknown example of this. “Post-positivist” writers, such as Kuhn and Feyerabend, have taken, or beentaken to support, more radical positions.

3. Arguably, it is a type of theory which also fits the natural sciences better than positivistic empiricismdoes, although this is a claim which would need to be defended elsewhere.

4. Kuhn himself does not explicitly argue this.5. This is related to, but not equivalent to, Mautz’s (1958) division of evidence into “real” (requiring no

further inference from evidence to conclusion), “testimonial” (depending on the statements of a thirdparty), and “indirect” (everything else).

6. A reviewer of an earlier draft of this paper raised a question about the role of probabilistic inference.The point of the question was that auditors do not believe that they can get at the world “as it actuallyis” because they can only use statistical and probabilistic tests, which necessarily leave room foruncertainty. This, however, does not cause any problems for their belief that there is a “reality”—itonly means that it is a bit inaccessible. No matter how, probabilistic statements about the world arenot statements whose truth is uncertain—in other words, the statement “there is a better than 99%chance that I will wake up tomorrow” may be quite certainly (100%) true. If a correspondence theoryof truth were viable, then there would have to be some probabilistic fact about the world to which thistrue statement corresponded. In other words, as far as theories of truth are concerned, probabilisticstatements are no different from any others

7. Empirical studies of audit judgement may throw light on how this is actually done by auditors withoutbeing able to throw any general light on the question of how they should be doing it.

8. A “reductio ad absurdum” proof of a statement is a proof which shows that the contrary of the statemententails a contradiction, so that the statement must be true.

9. Arguably this is a question of grammatical rules in the (somewhat idiosyncratic) sense intended byWittgenstein in some of his earlier writing—for a neat example, see Stern (1995, pp. 44–45)—but adevelopment of this perspective could render an already difficult line of argument completely opaque.

10. The consequences of this are not, in general, taken very seriously by philosophers (or academictheorists in general?), who are inclined to think that if a belief is intelligible in any sense, then it mustbe philosophically addressable. (This may be closely related to a belief that it would not be intelligibleto believe that doing philosophy is impossible.) Part of what I am suggesting is that it is possible thatsome beliefs could be perfectly intelligible (at least in the sense of not being logically incoherent, and

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possibly according to other standards as well), but just could not form part of any valid philosophicaltheory, because they would be inarticulable

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